On May 17, 2011, the Internal Revenue Service (IRS) released IRS Notice 2011-32, which makes changes to Health Savings Accounts (HSAs)effective for calendar year 2012. The notice makes changes to the annual contribution limitations for single and family coverage; and the maximum out-of-pocket employee expense for single and family coverage under a high deductible health plan. This legislative brief provides a summary of IRS Notice 2011-32.
2012 HSA Contribution Limits
An employee must be enrolled in a high deductible health plan (HDHP) in order to qualify for an HSA. Under IRS Revenue Procedure 2011-32, an individual with single coverage under an HDHP may make up to $3,100 in deductible contributions to his or her HSA, up from $3,050 in 2011. An individual with family coverage under an HDHP may make up to $6,250 in annual deductible contributions, up from $6,150 in 2011.
2012 Out-of-Pocket Expense Limits
The maximum out-of-pocket employee expense under an HDHP, including deductibles, will increase next year to $6,050 for single coverage, up from $5,950 in 2011. For family coverage, the maximum out-of-pocket employee expense will increase to $12,100 next year, from $11,900 in 2011. The out-of-pocket expense does not include insurance premiums.
Deductibles
The deductibles under an HDHP must be at least $1,200 for single coverage and $2,400 for family coverage. These deductibles were not increased from the 2011 requirements and will remain the same for the 2012 calendar year.
Effective Date
These new limits are effective for calendar year 2012.
More Information
For a copy of IRS Notice 2011-32, please see www.irs.gov/pub/irsdrop/rp-11-32.pdf.